She says there is a high level of understanding of the familiar RMA model and the cost of any further change would be a drag on the entire infrastructure sector.
Arthur-Young says ideally governments should have a longer-term focus so that businesses don’t face conditions that change with New Zealand’s relatively short election cycle.
“I’m concerned that we may have to start from scratch all over again. We have seven to 10 years of trying to understand the RMA and working with local governments.
“They are already overstretched and have a lot of other things they want to be doing outside of rewriting plans and litigating plans. It’s not as simple as just let’s get a new system embedded in. It takes decades of transition in this very complex area.”
Arthur-Young’s legal practice covers all aspects of resource management. She focuses on development and large-scale infrastructure projects. She is also the board chairwoman at Russell McVeagh.
Like other business sectors, infrastructure and development companies are used to a degree of uncertainty.
Conditions change constantly, that’s a given. Yet investors are looking for regulatory certainty, Arthur-Young says this ties in to how we deal with New Zealand’s infrastructure deficit where capital is limited.
“We’re anticipating there will be some stability again in that RMA space. And we think we are going to see the same in the infrastructure space unless there is something wild happening behind the scenes.
“There seems to be a high level of political agreement about the infrastructure deficit and the work that needs to be done to fix it.”
Another aspect of certainty the infrastructure sector looks for what it calls the “pipeline”, that is a flow of projects extending into the future.
“The more that pipeline is visible, the more infrastructure investors are prepared to pour into the longer-term skills and resources needed to build infrastructure.
Arthur-Young says she sees changes to that pipeline.
“This new Government will be looking to prioritise. It must make some choices quickly; some are probably already made.
“Take Auckland light rail and the second harbour crossing. There is the priority of roading projects versus non-roading projects.
“There will be a consolidation and prioritisation of the infrastructure spend, we can’t do everything.”
There is less money around than at the start of the previous Governments. She says that means there are going to be winners and losers, but what we don’t need is what happened with Auckland light rail when the project was on, then off, then on again: “That approach does not instill investor confidence”.
There is always a period of adjustment when a new Government arrives with a different set of infrastructure priorities.
The first thing her clients look for is greater clarity about those new priorities.
“Without that they don’t know where to invest. When the choices are made, there are winners and losers,” Arthur-Young explains.
“Say, if a client has invested in a greenfield area where the land might be deprioritised in terms of water, wastewater and roading.
“At least they now know they need to look to invest in other areas where there is growth and development.”
She says the National Party went into the election being clear that it would support helping to fast track and make the consenting process easier for projects such as solar, offshore wind and the like.
“Having certainty and clarity of purpose in those areas means that those of our clients who operate in that space will be able to stretch their legs and invested in projects.
“Investors are not likely to open their cheque books if the consenting pathway for a project is fraught and bedevilled with risk either from a council perspective or objecting neighbours.
“That’s when projects can start to become marginal, especially if you are looking at five to 10 years of litigation to get something through. I think we are seeing signals from the new Government around fast-tracking, incentivising renewable infrastructure even if it might mean an adverse landscape effect or even if it means building solar farms on highly productive soil.”
Problems arise where there is ambiguity at a national level. “Are we still protecting wetlands, do we want to build solar farms, do we want more houses? There is always going to be tension in terms of environmental trade-offs and development.
“I think we’ve gone backwards over the last several years by not making choices. If you are trying to please everyone you have these incredible tensions between, say, building more houses or protecting the environment. I’m not saying one option is better, I am saying the choices need to be made.”
When these choices are not made at the national level, the uncertainty filters all the way down and you end up with highly stretched and underfunded local government, which is going to be conservative.
There are huge opportunities for the infrastructure sector and serious challenges, but New Zealand is fortunate that there is stability in the government and the wider economy.
Arthur-Young wants this extended to infrastructure and resource management.
She says: “We can do anything, but not everything, so let’s focus and send a clear message to the market. Then appropriately fund the people who have to implement the plan and stop tinkering with it.
“It concerns me that as a country we often end up churning up capital and good ideas by tinkering at the edges, we need to be more decisive.”
